INDU Committee News Release
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Standing Committee on Industry, Science and Technology |
HOUSE OF COMMONS CHAMBRE DES COMMUNES OTTAWA, CANADA K1A 0A6 |
Comité permanent de l'industrie, des sciences et de la technologie |
For immediate release
NEWS RELEASE
The Study of the Crisis Faced by Certain Industrial Sectors in Canada
Ottawa, June 17, 2009 -
On June 11, 2009, the House of Commons Standing Committee on Industry, Science and Technology tabled in Parliament the Committee’s report entitled A Study of the Crisis Faced by Certain Industrial Sectors in Canada.
In March 2009, subsequent to an instruction from the House of Commons, the Subcommittee on Canadian Industrial sectors began a study examining the impact of the economic crisis on certain Canadian industries. Over the next three months, the Subcommittee held 10 meetings with many industrial sector stakeholders, including officials from the aerospace, bio-tech, chemicals, forestry, information and communications technologies, manufacturing, mining, oil and gas, and railway supplier industries.
“The challenges facing these industries are numerous and onerous. Each industry faces a unique set of structural issues, but they all share the current overriding cyclical issue of an exceptionally deep global economic recession and a large contraction in credit and financing. For these industries, these cyclical issues are particularly acute because they compete in global markets and are, therefore, extensively dependent on export sales” said Mr. Van Kesteren, Chair of the Subcommittee.
The global economic recession took root in the United States – by far Canada’s leading export market – and spread to all other major advanced economies of the world, including Canada. The global economic recession is a cyclical event that will come to an end; it will be followed by an economic recovery that is expected to emerge once the global financial system is stabilized.
“Canada's economy has been affected by the global downturn and by actions that have been taken by decision-makers of foreign states and international institutions. Despite the external causes of this recession, Canadian governments are using fiscal and monetary policies to stimulate aggregate spending and improve credit conditions, such as industry-specific policies and programs for the automotive and the forestry sectors. These actions on part of Canadian governments will allow us to mitigate the most acute aspects of this global recession,” said Mr. Chong, Chair of the Committee.
The Committee’s report contains 17 recommendations, including the following:
- That the Government of Canada focus on establishing conditions that make Canadian businesses competitive around the world. In particular, this means establishing regulatory consistency and predictability, and keeping down the taxes paid by both Canadian consumers and businesses, including payroll taxes.
- That the Government of Canada explore measures to increase foreign venture capital investment in Canada.
- That the Government of Canada examine the issue of Scientific Research and Experimental Development (SR&ED) tax credits, including partial refundability, and consider making changes as a potential mechanism to increase greater private sector investment in R&D.
- That the Government of Canada continue to support Canada’s forest economy by developing policies that support innovation in the forestry sector, including R&D investments in greener technologies such as the development and production of cellulosic ethanol and forest biomass, by investing in retraining, and by supporting communities which have historically depended on sub-sectors that are in structural decline. In particular, the government should continue to use Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) to support new investment in this area, and ensure that EDC has the flexibility to provide financing to any domestic company. While supporting the forest economy, the government must remain mindful of its obligations under the Softwood Lumber Agreement, North American Free Trade Agreement and other trade agreements.
- That the Government of Canada maintain and expand the Strategic Aerospace Defence Initiative, while continuing to require loans to be refunded in order to ensure taxpayers are getting value for money.
The Committee believes that the Government of Canada’s timely implementation of its recommendations will be of assistance to Canadian industry in its efforts to meet both its cyclical and structural challenges, and will enable it to emerge from the global economic recession in a more competitive position and better prepared to take advantage of the opportunities that the global economic recovery presents.
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